Wellstream shares dip after it rejects £755m bid from GE

SHARES in Wellstream came under pressure yesterday after it emerged that the oil services firm had rejected a £755 million takeover approach from US conglomerate General Electric.

GE confirmed its interest in Wellstream but said its 750p-a-share cash proposal had been rebuffed.

Wellstream shares closed down 2.4 per cent, or 19p, at 761p as the news dashed investor hopes for a takeover bid at a significant premium, having dropped by as much as 11 per cent at one point.

GE's revealed price came in short of the 800p-a-share rumoured in the market.

The US group signalled it may not up its proposed offer despite being "disappointed" by Wellstream's rebuttal.

It said: "GE is disciplined in its acquisitions, and as such, there can be no certainty that it will take any further action.".

Newcastle-based Wellstream's shares have reached as high as 797p in recent weeks after the group revealed last month it had received "a number of preliminary approaches".

It is thought that Vetco Gray, GE's Aberdeen-based oil services arm, made the approach for Wellstream, with other bidders since coming forward.

Analysts said news of GE's bid price may now prompt more serious approaches.

Keith Morris, at Evolution Securities, said: "GE's approach looks a tad cheeky in our view and its rejection may flush out another approach. Another suitor may break cover now that GE has laid its cards on the table and indicated that 750p is the upper end of its price range."

Wellstream has been listed on the stock exchange since 2007, but it spent much of its history under US ownership, having been founded in Florida in 1983.

It was bought by Dresser Industries in 1995. The group then became part of US oil company Halliburton after Dresser merged with the firm, but was then bought again in 2003 by private equity before being listed in London.